federal reserve

The Bitcoin Phenomenon Part 2

/ Marcus Curtis / 2 Comments

In part 1 of “The Bitcoin Phenomenon” we covered all the background about this currency. We covered a brief history of cryptocurrencies, and we covered some problems associated with them. We also covered some of the risks. If you have not read part 1 then click here.

Make no mistake, people have made money by investing in bitcoin, people have made money by investing in other cryptocurrencies too. This is not like the dinar in the sense that only the dealers and the gurus are making money. There has not been anyone that has ever become wealthy by investing in the dinar. In fact, the word is out that the dinar was pretty much an investment scam.

This is not the case with bitcoin. If this cryptocurrency was a known scam, as some have claimed, then NASDAQ would not consider trading it, and the exchanges would leave it alone. One of the main reasons bitcoin has soared in price is that the exchanges are now trading bitcoin. The dinar and other third world currencies were sold based on hype about a fictional revalue. The networks of gurus were actually getting kickbacks from dealers to promote the hype, while at the same time appearing to be independent.

However, I do see something that disturbs me. There seems to be a lot of hype based on fiction with bitcoin as well. Because of the potential to make money, common sense has left many investors. Reasoning and understanding is left in the dust as people rush out to buy it. Some of the same patterns we have seen in the dinar world are starting to emerge with bitcoin. This cryptocurrency has acquired its very own set of gurus, and information is made up. Nothing is vetted or verified, and total fictional fabrications are made up to make the investment more attractive. This causes many people to over-leverage, and they are not aware of the risks.

This seems to be the same identical behavior that has happened with other cryptocurrencies too. This is part of the pump and dump process.

  • Step one; your group buys a cryptocurrency in massive quantities and drives the price up through demand.
  • Step two; make up lies and events to promote the currency. The reason for this is to present the appearance that the currency is going to go much higher. “Oh my, how high will it go?” This will attract many new investors. It’s like the shiny part found on a fishing lure.
  • Step three; once the new investors are in, dump your investment and get out.

Please allow me give you an example of the current bitcoin hype,

Central Banks Buying Cryptocurrency in 2018

The above article claims that the G7 central banks will buy bitcoin in 2018 due to the problems associated with all fiat currencies. Inflation seems to weaken fiat currencies because they have no intrinsic value, and bitcoin is immune to that. Because bitcoin is rising in value and is worth more than fiat currencies, the G7 central banks will buy bitcoin to use as a reserve for their currency. It will be used in SDR transactions, and placed in the basket of currencies. Because it is well-known that the definition of fiat means “no intrinsic value”, bitcoin will replace all currencies as reserves over the course of time. At least this seems to be what this article claims to me. Maybe I am wrong.

CNBC has produced an article with the same information, but then it says these are the claims made by the CEO of blockchain. Ah ha! Something does not sound right to me. The two currencies presented to be picked up by central banks according to this CEO are bitcoin and ethereum.

CNBC article

The Truth Is……

Let me explain a few things and give my analysis. First, “fiat” does not mean “no intrinsic value”. Fiat currency is currency that is used by a government because of decree or law. Outside of that decree or law it has no intrinsic value. When gold was used for money it had value outside of any law or decree, whereas our paper currency does not have value. The law that gives the U.S. dollar value is the Federal Reserve Act, and a series of laws were passed during the early 1930’s which modified the act, making it even stronger. These laws serve to protect the dollar against counterfeiting and declare that it is the official currency of the United States. When you pay your taxes it must be in dollars!

Dinar gurus constantly made the claim that the definition of “fiat” is ‘no intrinsic value”, as if to imply that the dollar really has no value and it was all based on faith, even in regard to the law of the land. This is where some of the GCR propaganda comes into play. I now see bitcoin gurus making the same arguments that we debunked when the dinar was popular! The reason for this is to hype bitcoin so investors can make more money.

Well I’ve got news for you. Bitcoin has no laws issued by governments to protect it. In fact, the value of bitcoin is also based solely on faith! It is also perceived! “Cryptocurrencies are, at the moment, treated universally as assets, and not as currencies for tax purposes. This means that if the price of bitcoin rises against the dollar and you cash in, then you are liable to pay capital-gains tax on the appreciation of the currency. If the value of the U.S. dollar rises 20% against the pound, then you are not liable to pay capital-gains tax on that appreciation!

Bitcoin started out as a currency independent of a central banking system. Without a central bank to regulate bitcoin there is no way to control the supply. In the past, the Federal Reserve has reduced the physical money supply in the USA as demand drops. When demand increases, more physical currency is put back into circulation. This action preserves the value of the dollar and it controls inflation. The Federal Reserve can also reduce the money supply to match a reduction in demand!

https://tradingeconomics.com/united-states/money-supply-m0

While bitcoin expands due to mining, there is no built-in contraction mechanism should demand drop. This is probably the main reason bitcoin has been so volatile in the past. This is why all cryptocurrencies are subject to pump and dump schemes. Cryptocurrencies will almost always have massive imbalances in supply and demand, because there is effectively an unlimited supply of them but a clear demand ceiling. The fatal issue for cryptocurrencies is that the supply can only go up! There is unlimited upside to the supply of all cryptocurrencies.

Even though an individual cryptocurrency may have a ceiling on supply, there are many of these currencies out there. If a new cryptocurrency is introduced in the future, and if it is believed to be superior to all existing cryptocurrencies, then you would likely see a massive move out of existing cryptocurrencies and into the new superior currency!

Furthermore, because you cannot reduce the supply of a cryptocurrency, that drop in demand would not be matched by a drop in supply! If demand goes down but supply does not, we will all see a drastic reduction in the value of that cryptocurrency. Its economics 101.

The ever-increasing supply of cryptocurrencies can be seen in the recent boom in so-called “initial coin offerings”. One of the main problems with bitcoin and other cryptocurrencies is that people still view them as investments rather than a means to exchange goods and services. New cryptocurrency startups will issue digital coins or tokens in exchange for real money. This real money is then used to fund projects. Billions have been raised using this method.

This ultimately means that cryptocurrencies fail in the two key areas of what makes a currency a currency! A currency has to be a widely used as a medium of exchange. Cryptocurrencies are never going to achieve that as long as they are used as an investment.

Second, you cannot use cryptocurrencies to settle tax liabilities. On average, around 34% of all economic activity is taxed. Governments are not likely to accept cryptocurrencies that they do not control to settle tax debts. You are therefore removing one of the main sources of demand for a currency. One of the key issues, whenever we talk about monetary economics, is that the money supply should never be considered in isolation of demand.

All money supply needs to be considered against money demand. If you do not have the ability to use cryptocurrencies for the largest single transaction in the economy then it will never be used as a major medium of exchange.

The Jiaozi was a banknote that was used around the 11th century. They first appeared in the Sichuan capital of Chengdu, China. Many numismatists (currency collectors) regard it as the first paper money in history. The banknote came from the Chinese Song Dynasty (960–1279 AD). It was highly successful at first because the kingdom of Sichuan insisted that people pay their taxes using this paper currency. Because of this requirement there was an enormous demand. For a while the paper currency kept its value.

There were no economists in the kingdom of Sichuan. Unfortunately they just kept printing the stuff. They were in serious trouble when the money supply exceeded demand. This is why governments won’t accept bitcoin to pay taxes. It removes demand for the currency they control.

Another key feature of a currency is that it acts as a store of value. This means you can put your money into it and be reasonably sure that in normal circumstances its value will not fluctuate on a massive scale. Cryptocurrencies cannot do that. Bitcoin has had many hyperinflation episodes. In a few cases it has dropped as much as 80 percent in value. In some cases its ability to purchase goods has dropped more than 25% in the course of just one week. That is not a stable store of value.

The G7 countries (Also known as The Group of 7) is a group made up of Canada, Germany, Japan, France, Italy, the United States and the United Kingdom. These countries have the 7 largest advanced economies in the world. These economies represent more than 62% of the global net wealth with an approximate value of $280 trillion. It is highly unlikely that these countries will use a cryptocurrency that has a track record of being 18 times more volatile than the US dollar! Furthermore, if these central banks ever accept bitcoin it will remove demand for the currencies these countries already use and control.

Will the International Monetary Fund allow bitcoin to be used along with SDRs to settle debts when the value of bitcoin changes so rapidly? That is highly unlikely! Let us recognize these assertions for what they really are. This is hype to make these cryptocurrencies appear to be an investment without high risk!

I think that in the end it would be ironic if central banks controlled a cryptocurrency like bitcoin through buying all of it as an asset. They would control a currency that was never designed for them to control.

The Truth About The Coming Dollar Collapse on September 27th 2016

/ Marcus Curtis / 30 Comments

us-dollar-collapseThere is a strange belief floating around on several monetary conspiracy websites and blog sites. This belief can also be found on many YouTube channels. It says the dollar will totally collapse on September 27th, 2016. As a result of this event, every world currency will also collapse and the global economy will suffer great calamity. Many people have bought into this theory. Is there any truth to it? Let’s explore more details about this belief. Here is their case from their perspective. This is basically a paraphrase of their thought process blended together from many of these sites.

What They Claim

The dollar collapse will be the single largest event in human history. This will be the first event that will touch every single living person in the world. This collapse will not only bring down our dollar but it will also bring down every fiat currency around the world. The collapse will bring hyperinflation and every fiat currency in the world will collapse.

The economy was hit hard by the fall in oil prices. As an example these falling prices have already affected daily life for Venezuelans and everything has become an uphill battle. Now that the oil bubble has burst, nations that depend on oil sales are going to face great economic problems in their country.

maxresdefault-1In the U.S. we cannot keep living like we have twice the income that we really have. The Federal Reserve created trillions of dollars to buy most of our national debt and mortgage debt with money that they created on the spot, and nobody will buy this mortgage debt in the future. It is a Ponzi scheme. Our national debt will have doubled in just the time Obama was in office.

The more there is a risk of a default in currency devaluation, the more interest rates are going to rise. We may be able to pay $20 trillion dollars of debt at 3 percent interest with some pain, but at 6 percent interest or above for any extended period of time it will cause a total economic collapse.

Things got so bad that since 2008 most banks will not lend any more on commercial ventures. Instead, they are either still gambling on markets or they are sitting on their money. Nobody wants to lend money for economic development because they are afraid that they will never get paid back. Many other businesses that could expand will not do so because they are afraid of higher costs in the future through government taxation and regulation. That is one reason people are dropping out of the workforce. There are fewer businesses in America in 2016 than there were before the 2008 crash.

There is no easy answer to the world debt problems because many people and nations around the world have been living beyond their means for decades. They have been amassing debt and entitlements that cannot be sustained. With their aging populations, there is no next generation being raised that will have the numbers needed to pay the bills. The credit line of many nations are maxed out, and the young cannot support the entitlements that the old were promised.

As if the spending beyond our means for decades wasn’t enough, many banks are still gambling with your investments. They take your money and use it as security to leverage investments worth thirty to a hundred times that amount. In 2008 some bubbles burst, and many that were gambling lost. Some financial institutions got bailed out, but most did not learn their lesson. It is even worse today than it was in 2008. These world banksters are still gambling with savers’ money.

Some big corporations and financial institutions could not pay their debts because of the severe downturn in 2008, so they either went bankrupt or were declared too-big-to-fail by our government, and the government bailed them out by Americans taking on more future debt.

Another reason for the lack of quality jobs is that the government cannot institute a policy to buy American-made products because they risk a trade war with other nations in the global economy who are also living beyond their means. The trade war is probably coming anyway because unemployed people of nations will demand that their government do something to protect their jobs.  All government can do to keep jobs at home is to allow protectionism.

Our future appears to be deflation, depression, or hyperinflationary depression which is bound to come as a result of overprinting the currency. This will allow the rise of populist demigods who will convince people that they know who is to blame and that they have all the answers. In other words, we are now repeating the same mistakes of the 30’s that led to the nationalist socialistic movements and the start of World War II. It will not be much different this time around, except that the stakes for the world will be much higher.

The same mistakes in housing in the US are being made all over again. The recent climb in values will probably be short-lived as this country goes back into the next phase of this depression. Foreign investment speculators who think we are in recovery are once again buying real estate and driving up prices. The percent of Americans owning their own home is actually still falling and has fallen to 1990’s ownership levels. Family income in the United States and hours worked is still falling. The recovery is most likely phony, and what recovery there seems to be is really built on the Federal Reserve creating more money and more government borrowing. The recovery is going to speculators in the top one percent.

But you can protect yourself from this entire calamity by purchasing gold and silver, or getting our inside trader stock tips or purchasing our newsletters. You might want to stock up on your stored food supply as well.

Conclusion

These thoughts are the case that is represented in most of the conspiracy videos, websites, and blog posts. These people prey on people who know little about economics. I debunked most of this rhetoric in my book “The Truth About The Coming Global Currency Reset.” Most of the panic in this analysis is mixed with half-truths in an effort to make it more believable. If you know anything about real economics then you can debunk most of what is being said here. So in an effort to ease any fear or worry, I will explain why this is a load of sewage. This information can be found in my book in greater detail.

Let’s Debunk This Crap

First and foremost, if the dollar were to collapse as these guys claim, why would they know the exact date on which it is going to happen? Some conspiracy sites say the date was chosen by the Illuminati or the Rothschilds. (Give me a break) I decided to do some research and see if I can find a reason for that date.

The Federal Reserve is going to issue the standard Federal Open Market Committee report on September 21st, just 6 days shy of the predicted date. Aside from that nothing unusual is going on with The Federal Reserve.

http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

Southwest oil independents have scheduled a rally on September 27 against OPEC oil imports.

http://www.freerepublic.com/focus/f-chat/3466296/posts

There is some speculation regarding interest rates in September.

http://www.forexnews.com/blog/2016/09/05/september-important-dates-capital-markets/

In the end, I could not find any concrete evidence as to why conspiracy nuts chose September 27th to be the end of the dollar. This date was picked months ago! As I stated earlier, if this were to actually happen to the dollar then no one would know the exact date that this event would transpire. I believe this is part of a marketing ploy that these end of the world doomsday merchants have cooked up through the use of their nut job guru network.

This creates urgency to buy more gold and silver. You feel a sense of urgency to store more food. You begin to prepare for the end of the world.

The same thing happens in the dinar world all the time. If you think the revalue is going to happen on next Monday and today is Thursday, then you are going to place an order out of urgency. You are going to buy more dinar or put dinar on reserve. This is exactly why a revalue is predicted to happen every Monday

There appears to be two YouTube accounts which are the source of this erroneous theory. They are “Money News” and “Economic News”. From there it spread everywhere else. I started watching one of the videos, “Why The US Dollar Will Collapse on 27 September 2016 ?”.  (over 700,000 views – see below)

This video is ridiculous. He starts off talking about a coming calamity, and then he says “will you take the proper steps to protect your family?” I am sure he is going to sell you the proper steps you need to take. There are many advertisements throughout this video, and with over 700,000 views some money is being made using fear tactics. Within two minutes of this video he mentions the National Inflation Association, which seems to have been debunked by Peter Schiff as a fake group with an agenda. (Check out the video below.)

Check out the National Inflation Association below

http://inflation.us/

peter-schiffI think it is ironic that Peter Schiff is also one of the economists that they claim supports their theory. The truth is this theory only attaches itself to small portions of what Mr. Schiff says. The rest is all made up. Most laymen don’t understand reserve currencies or money mechanics, so these things sound plausible when they are presented through outrageous storytelling. These YouTube videos have disabled their comment section and suspended their voting as if they are afraid of being debunked. By now major warning lights should come on.

Peter Schiff has a reputable background and while I don’t agree with everything he says, He makes valid points on the nation’s debt. He points to logical problems that face the country. It is too bad that the Global Currency Reset crowd takes his comments out of context and applies it to their own ill-gotten gain. Peter talks about a collapse in the economy if these problems are not addressed. These guys take some of his facts and change it to a total collapse of the dollar and a revalue or collapse of every currency around the world. They seem to latch onto Mr. Schiff in an effort to gain some of his fan base.

Furthermore, these GCR gurus have been predicting the collapse of the dollar since the beginning of the millennium. Recently Lindsey Williams predicted the dollar will collapse under a global currency reset in 2012. It was predicted to happen again in 2013. Then the dollar was going to collapse in the first quarter of 2014, and finally, the dollar was going to collapse at the end of the second quarter of 2014. That is when the dollar took off like a rocket. 2014 was a great year for the dollar and 2015 was the best year the dollar seen since 2005.

http://www.reuters.com/article/markets-forex-idUSL3N0UF0EA20141231

http://www.marketwatch.com/story/dollar-index-on-track-for-best-year-since-2005-2014-12-31

the-secret-cause-of-dollar-colla-480x360The last time the dollar crash was predicted was May 28th, 2016. Before that, the last prediction was in April of 2016. So as you can see, these Global Currency Reset guys have a long track record of being wrong. They have been wrong in 100 percent of their predictions. I predict that they are going to be wrong once again on September 27th. There is not going to be a major crash of the world currencies on that date! Let’s wait and see who is right!

Get Your Facts Straight!

These GCR guys mix a little fact with fiction to create an illusion in order to sell their products. The valid points make the invalid ones seem more plausible. This is no different from what the dinar gurus do. The only reason why it is addressed on this website is because dinar gurus have tried to link the GCR to the revalue of the Iraqi dinar. Let’s cover a few of these so-called facts.

First of all, there was never an oil bubble as these loons proclaim. Oil prices are driven by supply and demand. The more oil there is the less it cost. This is economics 101. The reason why oil prices are cheap is because Saudi Arabia flooded the market in an effort to shut down American fracking. The increase in oil production in America has led the Saudi’s to take this strategic approach. Russia also supplies the world with oil. This is how their economy recovered from the crash of the ruble in the 90’s. Canada is also looking for a better way to bring more of its oil to global markets. This is what the keystone pipeline was really all about. Now Iran is able to bring their oil to global markets as more sanctions are about to be lifted. There are many other oil-producing nations as well. So as you can see, oil is not likely to go up with major price increases anytime soon as long as new supplies enter the market and nations are competing around the world for oil sales. This is not necessarily a bad thing for the U.S.

It is true that Venezuelan citizens are suffering right now, but this is primarily due to the fact that Hugo Chavez took over the country and instituted communism. He appointed businessman Roberto Mandini president of the state-run oil company Petroleos de Venezuela. Chavez also set out to rewrite the Venezuelan constitution. He kicked out oil companies while keeping much of their equipment. He gutted most of the private sector. His actions had an effect on the country’s economy. While falling oil prices contributed to the problems that all Venezuelans now face, the root cause was communism and a gutting of private infrastructure.

https://en.wikipedia.org/wiki/Hugo_Ch%C3%A1vez

The problem with these GCR guys is anytime the price of some commodity drops they claim the commodity was really in a bubble, and the bubble collapsed because of debt or some other obscure reason. Supply and demand or natural laws regarding economics never seem to apply. From what I could gather, they believe several bubbles collapsed in 2008.

The dollar is actually a lot stronger than these arm-chair economists know. Ecuador, Zimbabwe, and the British Virgin Islands are just a few examples of countries that don’t have their own currency. They use the dollar exclusively for commerce among their citizens. There are many other nations that circulate the dollar along with their own currency because the dollar provides stability. In addition to this, the dollar can be found in reserves in most nations around the world. These reserves serve to back other currencies.

http://www.investopedia.com/articles/forex/040915/countries-use-us-dollar.asp

Let’s not forget about the petrodollar! In august of 1971, Nixon removed us from Bretton Woods. This is known as the Nixon Shock. In 1973 agreements were reached with Saudi Arabia and later OPEC. This agreement was that these nations will sell their oil only using the U.S. dollar. In returned the United States Government promised to make these oil-producing countries rich, and the U.S. would provide these nations with military protection if they were ever invaded. This is why we went to war with Iraq after they invaded Kuwait. Kuwait sells oil in dollars, and we had the responsibility to provide military protection due to the petrodollar system.

Selling oil in U.S. Dollars has been a source of strength for the dollar. While Saudi Arabia complains about fracking and at times has threatened to sell oil using another currency, the truth is this is highly unlikely because it will leave the Saudi government without military protection and they will be defenseless. Iran will more than likely engage with the Saudi government if this event ever took place. So as long as there is a demand for dollars in other countries because of oil sales, it is highly unlikely that the dollar will collapse anytime soon!

The Truth is there are a lot of problems with the Euro. We just witnessed the Brexit event. Spain, Ireland, and Greece, are just a few of the countries that have been a drain on the Euro. As a result, people are running away from the Euro and they are running to the dollar.  As the Euro weakens the dollar grows stronger.

http://demonocracy.info/infographics/eu/debt_piigs/debt_piigs.html

http://demonocracy.info/infographics/eu/cyprus_crisis/cyprus_crisis.html

In spite of all the problems with America’s debt, one of the advantages that the dollar has is that there really is not another currency out there that can replace it anytime soon. Most conspiracy nuts will point to the Chinese Yuan, but as we will soon see this won’t be an option in the near future.

America has been exporting jobs to China ever since Bill Clinton lobbied to make China a member of the World Trade Organization. Obama loaned General Motors 80 billion dollars. They used that money to build eleven new factories in China. They even made their research and development center in China. Many U.S. businesses have relocated to China.

China has benefited by keeping their currency values low. This has caused their exports to grow. If their currency becomes a major reserve currency that replaces the dollar then that will place more value on the Yuan. As a result, their exports will fall. China is not going to put themselves in this position anytime soon. While America has around 12 trillion in their M2 China has 130 trillion Yuan. Talk about printing money! They back their currency with approximately 1,000 tonnes of gold and U.S. dollars, so it is extremely unlikely that China will give up their export advantage in order for the Yuan to become a reserve currency.

hqdefaultMany of these conspiracy theorist claim that the dollar is a fiat currency. They say it backs most other currencies making them all fiat as well. The next claim is that the Federal Reserve is printing too much money, and we will see hyperinflation as more and more of this currency enters the economy. These statements alone should show you how out of touch these guys are with the actual facts!

The claim that the dollar is a fiat currency is made in an effort to imply that the dollar does not have any assets to back it. It is merely worthless paper. Nothing could be further from the truth! Currently, there is a little over 166,000 tonnes of gold in the world today. Out of that only 17.4 percent is used as an asset to back currency. Out of that number, the United States currently has a little over 8,133 tonnes of gold for the express purpose of currency backing. THIS IS AN ASSET BACKED CURRENCY! The United States has more gold than any other nation. The U.S. also has other assets that back their currency. Second in line is Germany with 3,396.3 tonnes of gold, followed by the IMF with 2,814 tonnes. These numbers can be verified by clicking on the links below.

https://en.wikipedia.org/wiki/Gold_reserve

https://www.gold.org/research/latest-world-official-gold-reserves

http://demonocracy.info/infographics/world/gold/gold.html

The Federal Reserve does not own one printing press with the express purpose of printing money. Any physical money that is made is done by the United States Treasury per the constitution! It is the responsibility of the United States Treasury to mint coins and print money! The Federal Reserve distributes the money the U.S. Treasury makes.

We currently have about 12 trillion in our M2 money supply. All of this money does not sit in America, and because of this it does not have a major impact on local inflation. About two-thirds of our currency is exported and used around the world. It sits in central banks and it is used as a reserve. It is used to buy oil and governments around the world conduct commerce with it. It is used by citizens of governments all over the world to conduct commerce. This notion that the Federal Reserve prints money is totally bogus.

https://en.wikipedia.org/wiki/United_States_Department_of_the_Treasury

https://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html

http://moneyfactory.gov/

https://www.treasury.gov/services/Pages/coins-currency.aspx

Final Thoughts

There is much more that can be said to debunk all the claims this conspiracy group is making, but I think by now you are beginning to get the point. I could go on for days debunking their propaganda. These Global Currency Reset guys all have an agenda. It seems to be this, buy our products or you will die and we are going to scare you to death with junk economics until you get the message! It is totally idiotic beyond belief to arbitrarily pick a date and then proclaim that to be the time when the dollar and the world economy will come crashing down all around us! It serves a purpose. It creates urgency.

The United States Dollar will not crash on September 27th, 2016! Any proclamation that it will is pure fantasy, displayed by people who are writing fiction and presenting it as fact for a profit!

 

 

 

 

Where do we go from here part 2

/ Marcus Curtis / 12 Comments

Where do we go from here? Good Question

In the last post we looked at the well-oiled dinar machine. We saw how the currency auctions buy US dollars and release more and more dinar. We saw how dinar makes its way back to the United States and is sold for US dollars. These dollars flow the other way into Iraq as a result of the dinar sales. We saw how over time the currency supply has expanded and there is now 35 trillion dinar outside of banks. Their M2 is 69 TRILLION. We saw how Jordan owns a great deal of the Nation Bank of Iraq and that it was given to them after the invasion. Jordan paid 7.3 million for 49 percent of the bank. They were and are instrumental in bringing the dinar state side

We also see that US dollars make their way to Iraq as they are traded for dinar. Because of this Iraq’s currency supply keeps expanding. They have not reduced the money supply. It has grown by trillions since I have been in this. In fact, in March of this year Shabibi has released another 6.5 trillion in the money supply. We followed the money and exposed the lies. Documents can be found on the CBI website.

So now let’s talk about what exactly is going on over there and let us identify all the players. Let us talk about our first player, the central bank. By looking at our central bank (the Federal Reserve) we can better understand Iraq’s central bank. What is a central bank?

After World War II the global government expanded. Under the United Nations umbrella global organizations were started. The International Monetary Fund, IBRD which became the World Bank, GATT which became The World Trade Organization, all started shortly after the war

http://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Trade

http://en.wikipedia.org/wiki/International_Bank_for_Reconstruction_and_Development

http://en.wikipedia.org/wiki/International_Monetary_Fund

These organizations all worked hand in hand with the Marshal Plan.

http://en.wikipedia.org/wiki/Marshall_Plan

“The reconstruction plan, developed at a meeting of the participating European states, was established on June 5, 1947. It offered the same aid to the Soviet Union and its allies but they did not accept it, as to do so would be to allow a degree of US control over the Communist economies”

Under this plan nations were rebuilt. A central banking system was started that was modeled after the Federal Reserve, and nations surrendered their sovereignty.

After the Invasion of Iraq the Coalition Provisional Authority (CPA) came in and set up shop. They were the temporary government in Iraq. They set up the central bank. Laws regarding the central bank are found in order number 56. Here are some of my observations from that order.

“Recognizing the problems arising from the former regime’s policies regarding governance of the Central Bank of Iraq,

Further recognizing the CPA’s obligation to provide for the effective administration of Iraq, to ensure the well being of the Iraqi people and to enable the social functions and normal transactions of every day life,”

“This Order establishes a safe, sound, and independent Central Bank for the purposes of achieving and maintaining domestic price stability, fostering and maintaining a stable and competitive market-based financial system, and promoting sustainable growth, employment, and prosperity in Iraq.”

http://en.wikipedia.org/wiki/Coalition_Provisional_Authority

http://www.iraqcoalition.org/regulations/20040306_CPAORD_56_Central_Bank_Law_with_Annex.pdf

Order 56 establishes a central bank separate from the government. It was also written into the Iraqi constitution that the central bank would be separate from the government.

http://en.wikipedia.org/wiki/Constitution_of_Iraq

“Independent commissions and institutions

The High Commission for Human Rights, the Independent Electoral High Commission, and the Commission on Public Integrity are independent commissions subject to monitoring by the Council of Representatives. The Central Bank of Iraq, the Board of Supreme Audit, the Communications and Media Commission, and the Endowment Commission are financially and administratively independent institutions. The Foundation of Martyrs is attached to the Council of Ministers. The Federal Public Service Council regulates the affairs of the federal public service, including appointment and promotion.”

Maliki and Alawai battle for the prime minister position. After the election in the first part of March they fight it out all the way to November over who will be the new prime minister. The Supreme Court of Iraq decides to move the central banks authority to the cabinet. This was in January of 2011

http://www.iraq-businessnews.com/2011/01/31/bad-news-for-the-central-bank/

http://www.google.com/hostednews/afp/article/ALeqM5i8h-h3ftciRwKfTOvCmRR5BJtHpA?docId=CNG.7bdc5ae33cb6afa079d4a84588e766f7.271

“A January 18 court ruling put several key independent bodies such as the central bank and election commission under cabinet supervision, arguing they should be answerable to the cabinet instead of parliament because their work was executive in nature”

In February of 2012 the amount of currency out of the CBI in circulation was 28 trillion 538 billion. In March of that same year it ballooned to 34 trillion 999 billion. So in one month Shabibi released 6.5 trillion dinar.

http://www.cbi.iq/index.php?pid=Statistics (click on the key financial indicators file)

Maliki tried to exercise the power given to him on January 18 2011 by the Supreme Court of Iraq. Parliament through a fit about this. They sent the cabinet a letter telling it not to interfere with the central banks policies

http://articles.chicagotribune.com/2012-04-11/news/sns-rt-us-iraq-centralbankbre83a18p-20120411_1_iraq-parliament-maliki-nujaifi

http://www.reuters.com/article/2012/04/11/us-iraq-centralbank-idUSBRE83A18P20120411

Maliki is being made out in the media as though he is trying to do a power grab. A vote of no confidence has yet to determine the fate of this government. In one corner we have the CBI run by Shabibi. In the other corner we have Maliki and the cabinet. And then we have parliament.

http://topics.nytimes.com/top/reference/timestopics/people/m/nuri_kamal_al-maliki/index.html

http://www.iiss.org/publications/strategic-comments/past-issues/volume-18-2012/april/iraq-maliki-power-grab-risks-fresh-civil-war/

http://www.realclearworld.com/articles/2012/04/23/maliki_power_grab_risks_iraq_civil_war_100019-2.html

http://translate.google.com/translate?hl=en&rurl=translate.google.ca&sl=ar&tl=en&u=http://www.alforatnews.com/index.php%3Foption%3Dcom_content%26view%3Darticle%26id%3D10606:2012-04-09-05-20-17%26catid%3D37:2011-04-08-17-25-57%26Itemid%3D57

So we have an Iraqi government in turmoil. Even though Maliki was given control of the central bank by the court in January of 2011, He never exercised that control until Shabibi decides to release Trillions of dinar into circulation. The question still remains what is the game plan here?

The main reason I am going into detail about all this is because there are several guru lies that are coming out to pump the sale of dinar. Pumpers are taking the opportunity to sell more dinars as a result of the events overseas by lying to investors once again. I am not going to name names yet. I am just going to debunk the lies first.

1. The first lie says that if Maliki winds up controlling the central bank there is a 70 percent chance that they will not redenominate. Instead they will revalue the currency.

2. The second lie states that Maliki wants to control the CBI so that the government can have a more direct line to the IMF.

The truth is if Maliki winds up controlling the central bank then things will get worse for Iraq on a global level. This is because it goes against the IMF model of having an independent central bank. That’s what the CPA set up, and that’s what they want. That is what the NWO globalist elite want. They want a separate central bank so they can have better control of governments and their economies. This is why Russia denied assistance under the marshal plan. They did not want to surrender their sovereignty.

If Maliki controls the central bank then you kiss can WTO membership goodbye. The dinar will not be a reserve currency, and there will be other trade problems as well! Gurus will use this to try to say Maliki will enforce a revalue. This is just not the case. The one world government, aka UN, IMF, WTO, World Bank, will reject the dinar because the central bank will go against the model of independence.

If there is a vote of no confidence in Maliki without addressing his concerns of corruption in the central bank then that could create a split in an already divided government and the government itself may begin to fall apart and become an Islamic regime. These are all possibilities.

http://www.tensdinarden.com/showthread.php?4685-Government-to-carry-out-the-responsibility-of-the-Central-Bank-of-smuggling-180-bil

So let’s talk about the economics of all this

Keep in mind that the above video was up loaded to you tube a few years back. All the points Mr. Jagerson makes are still relative today

Revalue

How would a Revalue work? If the dinar would go to $3.00 as some gurus claim and there is 35 trillion outside of banks? That would put a value on the dinar somewhere around 105 trillion US dollars. Anyone can see this is just not plausible. It is not possible for the dinar to RV to $1.00 given the current dinar outside banks. That’s a dollar value of 35 trillion. This amount is double our debt and it is triple our M2 money supply. Even an RV of 1 penny would bring a threat of hyperinflation as this would have an overall effect of expanding the money supply. That is a 1,000 percent increase in the currency’s value. This has never happened in History….. EVER! A Revalue is a policy decision just like devalue is a policy decision. It only affects peg currencies. Floating currencies adjust according to market demands. Pegged currencies like the dinar need to adjust from time to time.

Shabibi has always said that a revalue is used to combat inflation. It is what they do to control inflation. If the adjustment is too much it will have the opposite effect. The last revalue was just 4 pips 1170 to 1166. Slight movements are used to keep the currency in balance.

Redenomination

A redenomination is a whole different animal. I use to think that Iraq was not talking about redenomination when they were talking about raising the value of the currency and dropping the Zeros. After all how could Iraq do this with a 50, 250, and 500 in circulation? The basic Guru presentation is they will remove the 25,000 10,000, 5,000 and 1,000 notes. (The notes with three zeros) and then they will raise the value of the existing notes and introduce lower denominations. This will happen in one night as trillions of dinars suddenly rise in value. No one stops to consider the economic chaos that will come from this. Not only has an RV this big never happened before in history. This scenario has never happened before in history.

The truth is redenominations happen all the time. Reducing the amount of currency people carried, dropping the zeros, and raising the value is all redenomination language. When a redenomination happens a new ISO currency code is released. (AKA ISO 4217 Country-Currency Code) The ISO code is 3 letters that identifies the Currency for a country. For example, USD = US Dollar, IQD = Iraqi Dinar

In a straight across redenomination a new series of currency will be released and a new ISO code is issued. There is a trade in period or time frame when both series of currencies will coexist. Once the time frame expires the old series will no longer be valid. Every note in the old series will be taken out of circulation. If Iraq redenominates the 500, 250, and 50 notes will all be removed and will not be valid after the trade in period. Here is how a straight across redenomination will work.

OLD CURRENCY IQD                        NEW CURRENCY NEW ISO

One 25,000 note old dinars =                            One 25 note new dinars
One 10,000 note old dinars=                             One 10 note new dinars
One 5,000 note old dinars=                               One 5 note new dinars
One 1,000 note old dinars=                               One 1 note new dinar
Two 500 notes old dinars=                                One 1 note new dinar
Four 250 notes old dinar=                                 One 1 note new dinar
Twenty 50 notes old dinar=                               One 1 note new dinar

Keep in mind that the dinar further breaks down in units of fils, Kind of like our dollar breaks down into cents. This will be reflected in the redenomination process.

When there is a redenomination every old note will be pulled out of circulation. 35 trillion outside of banks will become 35 billion outside of banks. There will be no loss of value. Between 1960 and 2005 there were 70 currency redenominations. Some countries redenominated more than once. Since Redenomination has a historical precedence and the mythical RV of a 100,000 has none. Which one do you think Iraq is likely to do?

Terms like removing the zeros, raising the value, and LOP, carrying less money, Are all slang terms for redenomination. See for yourself. Check the links below. The problem here is Iraq, News organizations, and international governments are using redenomination and revalue interchangeably as if they all have the same meaning. This is where a lot of the confusion is coming from. While some of the articles declare a revalue of the currency, they really reveal and declare a redenomination process.

http://www.unc.edu/~lmosley/APSA%202005.pdf

http://en.wikipedia.org/wiki/Redenomination

http://www.commondatahub.com/live/geography/currency/country_currency_codes

One More

At this point I have almost said everything I set out to say. I will only post an article one more time. This will be the conclusion to the matter. After that I will be done. I plan to move on with my life after this and move away from following the dinar investment. If you are holding dinar or you are considering investing, be very careful! The gurus and the forums will not tell you what is really going on. This is because they are all making money off of you believing there will be a mythical revalue.